J&J splits off troubled consumer-drug unit

Johnson & Johnson is taking apart its troubled McNeil Consumer Healthcare unit, splitting it into pieces by geography and product type, allowing closer focus on the U.S. consumer drug operations that have suffered so many recalls over the past 18 months. That business--which will make up its own, separate unit--will be run by J&J vet Pat Mutcher, Reuters reports.

J&J's vast consumer business had been one business unit, marketing everything from baby wipes to Tylenol. Now, under the umbrella of a new Global Franchise Organization, the product lines will be organized into four categories: over-the-counter drugs, skin care, oral care and women's health. Regional divisions--North America, Asia-Pacific, Europe/Middle East/Africa and Latin America--will market all of the product lines.

Except--and this is a big except--for the U.S. over-the-counter business. That's the chunk of business responsible for most of J&J's long series of recalls. The unit comprising three plants that are now subject to an FDA consent decree. As the Wall Street Journal reports, Jesse Wu, recently appointed to head up all J&J's consumer businesses, told employees that he is making McNeil separate "in order to give focused attention to quality and compliance, and the critical task of restoring" the OTC products' once-sterling image.

That's not going to be an easy task. An inside source told the WSJ that the company's promise to clean up its act is just that--a promise--until the clean-up actually produces results. And, the source added, "[T]hese things are difficult to fix." Witness the continuing recalls, the latest of which was announced only yesterday.

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